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We write to you in follow up to our earlier message about the provincial budget now that more details are available as promised. Unfortunately, the emerging budget picture is not as good as we had initially expected.

As of April 1, the funding that we receive from the Government of Alberta Ministry of Advanced Education and Technology is one all-in budget rather than an operating grant plus several other streams of funding. The Ministry is referring to this all-in funding for each post-secondary institution as its Campus Alberta Fresh Start Grant.

The operating grant was indeed held to a 0% increase as indicated by the Ministry and communicated to you. However, several other funding streams have now been rolled into this Campus Alberta Fresh Start Grant, and the total is less than the previous sum of the parts.

For example, the Enrolment Planning Envelope (EPE) program has been eliminated. As a consequence, any EPE and EPE-related funding not already received by the university is at serious risk. We are not sure at this point what impact this will have on enrolments.

This consolidation of funds equates to a reduction of 4.5% in provincial funding, or approximately $27 million less in the Campus Alberta Fresh Start Grant when compared to original expectations. It is clear that the financial situation and budget gap for next fiscal year is more serious than has been projected.

There are many variables still outstanding, including uptake of the Voluntary Retirement Incentive Program, Board of Governors action on the Common Spaces, Sustainability, and Services (CoSSS) Fee, and decisions from the Ministry around market modifiers that will directly affect the projected budget gap. We continue to find administrative efficiencies for savings. In addition, we will introduce within the next few days a program for additional voluntary furlough days. The 5-Day Personal Leave Program will allow staff members to take personal leave days on a voluntary basis as leave without pay between July 1, 2010, and June 30, 2011. This will offer some reduction of our projected budget gap. Nonetheless, it is very hard to imagine a scenario at this point that does not include across-the-board budget cuts. Again, many variables remain outstanding, but we anticipate budget cuts, on average, of 5%.

We are talking constantly with government officials on the implications of this funding change in a very complex institution and on a complex budget.

We stand ready to work through with you the implications of these changes to funding and any resulting cuts to your budgets. Maintaining the quality of the University of Alberta’s academic enterprise remains our highest priority and that enterprise depends on the hard work of our talented people. These are without a doubt challenging times and difficult conversations, but working together we will do our best to minimize the impact to your programs.

We will continue to communicate directly with you as more information becomes available.

Carl G. Amrhein                    Phyllis Clark